How the iPhone impacted Five Major Industries

On June 29th, Apple will celebrate the 10th anniversary of shipping the iPhone. Although the iPhone was introduced at MacWorld in January of 2007, the iPhone did not actually ship until the latter part of June of that year. I was lucky enough to get a preview of the iPhone the day before it was introduced at MacWorld and Apple SR VP of Marketing Phill Schiller put the iPhone on a coffee table and asked me what I saw. I told him I saw a piece of glass in a metal case. He told me that is what Apple’s wants you to see. In off mode that is exactly what it is. But once turned on, that is where the magic is. Apple sees themselves as a software company first and creates devices, like Mac’s, MacBooks, iPods, iPhones, Apple TV and Apple Watch to run their innovative software.

Before the iPhone was released there was a lot of hype around the iPhone; It was even nicknamed the “Jesus” phone as some felt it would be miraculous. At the time none of us believed it could live up to the hype but to our surprise this time the hype was correct and indeed the iPhone turned out to be a new powerful technology that has impacted the lives of hundreds of millions of people around the world. For almost all, it has changed the way they communicate, work, learn and play.

But perhaps the most surprising thing about the iPhone, besides how it has become the most important technology most of us have with us all of the time, is the impact it has had on five major industries.

The first industry it has upended is the PC market. Until the iPhone shipped, we were selling around 400 million PC’s a year. But as the iPhone and, smartphone’s in general, have become critical tools for information and used for both productivity, voice, texting, and pleasure, the PC has become less important to many people. Until the mobile revolution that came with the iPhone, the only way people could get onto the Internet was from a PC or laptop. Today, thanks to the iPhone, iPad and the Android equivalents that basically copied Apple’s designs, people have much more options to make the connections they need no matter where they are. Consequently, the PC industry is now shipping only about 275-290 million PC’s a year and this has caused a level of industry consolidation that is now concentrated around mainly Lenovo, HP, Dell, Acer, and Apple. What Apple did that really impacted the PC market is it put a PC in your pocket.

The second industry that was impacted was Telecom. Before the iPhone, ATT, Verizon and most of the original telco’s business models were around voice. Yes, VOIP became popular by 2000 and had already started pushing them to move to digital voice instead of traditional land-line voice delivery methods, but with the iPhone, it pretty much forced them out of the traditional voice business altogether. Just try and find a pay phone today compared to the millions of payphone’s that were in place in 2007.

Now, all of the telco’s are data communications companies who have a totally different business models compared to what they had in 2007. And all of them have added to their digital communications business things like information services, entertainment services etc and all are now a conduit for supplying data services of various types to their customers.

The third industry the iPhone turned on its heels is the movie and TV industry. For most of my life in order to watch a movie I had to go to a movie theater and to watch a TV show I had to sit in front of my television at home. But the iPhone created a mobile platform for video delivery and since 2007, every major movie and TV studio has been forced to expand their distribution methods to include streaming services to both fixed devices like a TV and mobile devices. However, it was the millions of iPhones out in the field that was capable of letting people watch video anytime and anywhere that forced these studios to move in this direction. It also spawned new types of video services like Youtube and even Netflix, Hulu and others have become video powerhouses in which at least 50% of their content is viewed on some type of mobile device.

The fourth industry the iPhone impacted has been the gaming industry. Before 2007 most games were either delivered on a game console, a PC or a dedicated handheld device like the Nintendo and handheld game players. But the iPhone expanded the market for games and now almost every game, unless it is highly video driven or maximized for use on dedicated consoles or high-end PC gaming systems, are now available on the iPhone or some type of mobile platform like a tablet.

As a result, the gaming market, which in 2007 was a rather narrow market, has now expanded to one that allows hundreds of millions to play games on their iPhone or smartphone equivalent, something that was not possible in 2007.

It has also impacted the health industry. Today one can use an iPhone to monitor various health issues as well as giving people ways to get access to their health information, make a connection with their health professionals and even get health advice anytime and anywhere they happen to be. Only recently have we started to see how a smartphone impacts the health industry and we will see its role expand as this industry embraces the smartphone for outpatient care.

But perhaps the biggest impact it has had is on Apple itself. Before the iPhone, Apple was known as Apple Computer. Today it is Apple Inc, a company that makes much more than a computer. And the iPhone accounts for over 60% of Apple’s total revenue now and is bringing in record revenue each year. Apple is on track to potentially be the first trillion dollar company and is already the most valuable company on the planet.

Looking back over these 10 years, the hype before the launch of the iPhone underestimated what the iPhone could do and its eventual impact on industries and individuals. And with Apple on track to define and grow AR in Mobile, the iPhone and Apple seems to be ready to make the iPhone even more important to our digital lifestyles and most likely will impact other industries in ways we have not even thought of today.

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.